ANZ Retirement Readiness Summary

Retirement: Are you ready?

The more prepared you are, the greater chance you give yourself to live the retirement you want, and deserve.

The Retirement Readiness Summary is designed to provide you with a simple snapshot of your estimated retirement balance, along with a guide of how much you may need to live your desired retirement lifestyle.

Things you should know about the Retirement Readiness Summary:

Things you should know before you start:

It is designed to provide a high level estimate of how much superannuation you may need to fund the retirement lifestyle you desire.

The purpose of this summary is to highlight how you could benefit from receiving personal advice from an ANZ Financial Planner.

This summary is not intended to include or constitute personal advice and you should not make any financial product decisions based on this information.

It outlines the areas where you may benefit from receiving advice from an ANZ Financial Planner but it is not designed to provide personal advice regarding your superannuation or retirement planning.

It is designed to provide a high level estimate of how much superannuation you may need to fund the retirement lifestyle you desire.

The purpose of this summary is to highlight how you could benefit from receiving personal advice from an ANZ Financial Planner.

This summary is not intended to include or constitute personal advice and you should not make any financial product decisions based on this information.

It outlines the areas where you may benefit from receiving advice from an ANZ Financial Planner but it is not designed to provide personal advice regarding your superannuation or retirement planning.

Further considerations are outlined below.

I have read and accept the considerations outlined above and below.

Calculations

Your Details

Additional Considerations

Your Details

Current age

GenderMaleFemale

SalaryEstimated super balance

Additional contributions made from your salary each yearDesired retirement age

Additional Considerations

Do you / are you

Have or plan to have your property paid off

YesNo

Unsure if your property will be paid off by retirement

YesNo

Have other investments or savings (e.g. shares or property and deposits or savings accounts)

YesNo

Have multiple super funds

YesNo

Considering the Age Pension from Centrelink

YesNo

Have a partner with superannuation

YesNo

Considering making additional super contributions

YesNo

Have a Self Managed Super Fund

YesNo

Have insurance (such as Life and/or Income Protection) within your super or elsewhere

How well do you fare?

Estimated retirement balance Vs. desired retirement balance

This chart will display when the calculator has enough information to make a projection.

This graph estimates how much you may have in super by your desired retirement age based on the information you have given us and the assumptions set out below. It also highlights any gap between your estimated retirement balance and what you may need to have the retirement income you desire. Where your estimated balance is greater than your desired balance, only the estimated balance is shown. The figures are represented in today's dollars.

Next steps

We're here to help

The estimate provided in this summary is based on your high level information and does not take all of your finances into consideration. For a full analysis of any potential retirement income gap, we recommend you see an ANZ Financial Planner.

An ANZ Financial Planner can help you properly identify any retirement income gaps and assist you with financial strategies to help bridge those gaps and help fund your retirement.

The estimate provided in this summary is based on your high level information and does not take all of your finances into consideration. For a full analysis of any potential retirement income gap, we recommend you see an ANZ Financial Planner. ANZ Financial Planners can assist you with the following:

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Assumptions

Assumptions

Items

Descriptions

Current employer contribution rate

Your employer is assumed to contribute this percentage of your annual salary to your superannuation account in each projection year. The default is 9.5% p.a. In each projection year, your selected rate is subject to a minimum of the Superannuation Guarantee rate for that year. See Contributions section in the Notes for further details.

Desired income in retirement (yearly)

The annual income you believe you will require from your superannuation in retirement; you can base this on 75% of your current post-tax income.

Number of years you anticipate spending in retirement

Life expectancy increases every year (currently it is 83 years for males and 86 years for females). The Australian Life Tables 2005-07 are used as a basis for illustrating how long individuals could be expected to live.

Investment strategy pre-retirement

Select from the investment strategies listed a pre-retirement investment strategy to use in the projection calculations. You can enter an assumed investment return assumption of your choice (after investment management fees and tax on earnings) by choosing the "Other" option, capped at 20%.

Investment strategy after retirement

Select from the investment strategies listed an after retirement investment strategy to use in the projection calculations. You can enter an assumed investment return assumption of your choice (after investment management fees, nil tax) by choosing the "Other" option, capped at 20%.

Super account administration fee

Administration fee in your superannuation account. You can enter either a dollar amount, or use the field below to enter a % of assets. The default assumption is $0 and 0%.

Pension account administration fee

Administration fee in your pension account. You can enter either a dollar amount, or use the field below to enter a % of assets. The default assumption is $0 and 0%.

General wage inflation

Wages are assumed to increase at this rate over the projection period. This rate is also used as a discount rate to express projected figures in today's dollars.

Notes on assumptions

The Retirement Readiness Summary is designed to provide a high level estimate of how much superannuation you may need to fund the retirement lifestyle you desire.

The Retirement Readiness Summary outlines the areas where you may benefit from receiving advice from an ANZ Financial Planner but it is not designed to provide personal advice regarding your superannuation or retirement planning. It does not take into account your detailed personal objectives, financial situation or needs. You should consider the appropriateness of the information provided with regards to your objectives, financial situation and needs. Any personal advice which ANZ may provide you based on the information you provide in the summary must come from a qualified financial planner in the form of a Statement of Advice.

ANZ Financial Planners are representatives of Australia and New Zealand Banking Group Limited, the holder of an Australian Financial Services Licence.

The information, assumptions and calculations in this summary are current as at 1 July 2014.

No allowance has been made for any changes proposed in the 2014/15 Federal Budget that have not been legislated as of 1 July 2014.

The following notes set out further details about the assumptions used in the calculations carried out by this calculator.

General wage inflation

By default, wages are assumed to increase by 3.5% p.a. in each year. All results are expressed in today's dollars by discounting at this rate. You can change the assumed rate on the "Editable Assumptions" tab. The default assumption is set at 1% above the mid-point of the Reserve Bank of Australia's 2-3% p.a. target range for price inflation. This is consistent with the average historic difference between wage and price inflation in Australia over the last 30 years as measured by increases in Average Weekly Ordinary Time Earnings and the Consumer Price Index respectively.

Personal income

Your salary is assumed to increase each year in line with the assumed level of general wage inflation. Income tax is calculated by applying personal income tax rates plus the Medicare Levy (but not the Medicare Levy Surcharge) to your projected taxable income in each projection year. The personal income tax rates used for the 2014/15, 2015/16, 2016/17 and 2017/18 projection years are the legislated tax rates for those years as at 1 July 2014. In each projected year subsequent to 2017/18, the personal income tax brackets (and Medicare Levy thresholds) are assumed to increase in line with the assumed level of general wage inflation, even though such increases have not yet been legislated, as it is assumed that income tax would keep pace with inflation over this period rather than decrease in real terms, and the personal income tax rates are assumed to remain unchanged. The temporary budget repair levy of 2% on the part of a person’s taxable income which exceeds $180,000 is assumed to apply for the 2014/15, 2015/16 and 2016/17 financial years. You are assumed to be an Australian resident for taxation purposes. In calculating the Medicare Levy, the individual income thresholds are assumed to apply, and the family income thresholds are assumed not to apply. No allowance is made for the Mature Age Worker Tax Offset.

The Medicare Levy is assumed to be 2% of taxable income for the 2014/15 tax year and subsequent years.

In each projection year, your entitlement for the Low Income Tax Offset (LITO) is estimated based on your taxable income. The rates and thresholds used to calculate LITO in the 2014/15 and 2015/16 projection years are assumed to be the legislated rates and thresholds for those years as at 1 July 2014. The maximum amount of LITO and the income threshold over which the LITO starts to reduce are assumed to increase each year subsequent to 2015/16 in line with the assumed level of general wage inflation.

No allowance has been made for income from any other sources, including your spouse's income.

Contributions

By default, you are assumed to receive employer superannuation contributions of 9.5% of salary, subject to a maximum of your concessional contribution cap. You can change the assumed employer contribution rate and your current level of salary sacrifice (concessional) and personal contributions on the "Editable Assumptions" tab. In each projection year, if your employer's contribution rate is below the assumed Superannuation Guarantee (SG) Charge Rate for that year, your employer's contribution rate is increased to the assumed SG Charge Rate in that year. The SG Charge Rate assumed to apply in each year is as follows:

Projection year

Superannuation Guarantee charge rate (% p.a.)

2014/15

9.5

2015/16

10

2016/17

10.5

2017/18

11

2018/19

11.5

2019/20 and thereafter

12

No allowance has been made for the Maximum Superannuation Guarantee Contribution Base. It is assumed that your employer contributions are not affected by any salary sacrifice contributions.

Any contributions entered by you (both employer and personal contributions) are assumed to increase in each projection year in line with the assumed level of general wage inflation. Where a calculated contribution amount exceeds the relevant contribution cap, the assumed contribution is reduced to the amount of the contribution cap to ensure the contribution is not excessive.

The concessional and non-concessional contributions limits of $30,000 and $180,000 respectively are subject to indexation. Allowance is made for the higher concessional contributions cap of $35,000 (not indexed) applying from 1 July 2014 for individuals aged 50 and over on 30 June 2015. Contributions are assumed to be spread evenly across the year on a monthly basis. Contributions are assumed to be spread evenly across each projection year on a monthly basis and are to be paid until the retirement age you enter.

No allowance has been made for spouse contributions.

Contributions tax

Concessional contributions are assumed to be subject to tax at 30% in the super fund for individuals with income including concessional contributions over $300,000, and at 15% otherwise. Where an individual's income exceeds $300,000 a year due to the inclusion of their concessional contributions, the higher tax rate of 30% is assumed to apply to the excess over $300,000, with 15% applying to the balance of concessional contributions.

Co-contribution

For each projection year in which you make a non-concessional contribution, your co-contribution eligibility is assessed and a co-contribution is added to the superannuation account if applicable.

Your eligibility is assessed by comparing the projected "relevant income" amount to the co-contribution thresholds, and applying the standard rules for calculating the co-contribution. The "relevant income" amount is assumed to be your taxable income plus salary sacrifice contributions (the actual co-contribution income test also includes other amounts).

It is assumed you meet the other eligibility criteria.

The lower co-contribution threshold is assumed to increase in line with the assumed level of general wage inflation each year. The co-contribution matching rate is assumed to be 50c per dollar contributed and the maximum co-contribution is assumed to be $500. The upper co-contribution threshold is assumed to be $15,000 more than the lower co-contribution threshold. As assumptions have been made about your eligibility for the co-contribution, including your "relevant income", the projected co-contribution may not represent your actual co-contribution entitlement.

Any co-contribution payable is added to your superannuation account on 30 June in the respective projection year.

Low Income Superannuation Contribution (LISC)

For each projection year in which it is assumed you or your employer would make a concessional contribution, your eligibility for the LISC is assessed and a LISC is added to the projected superannuation account, if applicable.

In each case, your eligibility is assessed by comparing your calculated assessable income amount plus salary sacrifice contributions in the relevant year to the estimated LISC income threshold in that year, and applying the standard rules for calculating the LISC. It is assumed you have no reportable fringe benefits.

It is assumed you meet the other LISC eligibility criteria.

The LISC income threshold and maximum payment amount are assumed to remain constant over the projection period.

Any LISC payable is added to your projected superannuation account on 30 June in the respective projection year.

Investment returns

The calculator assumes the following investment returns for each investment strategy.

The investment returns are assumed to be "After Fees and Tax". This means after investment management fees and tax levied within a superannuation fund on investment gains only. It does not take into account other taxes such as those payable upon withdrawal of a benefit.

The assumed investment returns are illustrative and should not be taken to be an estimate of the amount of investment earnings you may receive. Investment returns are assumed to remain constant over the projection period. Actual investment returns will vary significantly from year to year and could be negative in some years, depending on the nature of the investments.

You can edit the assumed investment returns by selecting "Other" under both "Investment strategy pre-retirement" and "Investment strategy after retirement" in the "Editable Assumptions" tab.

Administration fees

The "Investment returns" section above includes an implicit allowance for investment management fees assumed to apply to each investment strategy. The following additional default fees are assumed to apply. You can change the assumed fees on the "Editable Assumptions" tab.

Fee type

Superannuation account

Pension account

Administration fee

$0 per year

$0 per year

Administration fees are assumed to be tax-deductible at 15% in the fund. Administration fees are assumed to be deducted on a monthly basis.

Any administration fees expressed as a dollar amount are assumed to increase in line with the assumed level of general wage inflation. Other fees expressed as a percentage are assumed to remain constant in percentage terms over the projection period.

Insurance premiums

For the purpose of this summary, no insurance premiums have been allowed for in the projected balance. If your superannuation fund has insurance premiums that represent a significant proportion of contributions made, you can enter the insurance premium amount in the super account administration fee editable assumption field.

Retirement

It is assumed you will retire at the end of the financial year in which you reach your nominated retirement age.

It is assumed you will have reached your preservation age or will have met a relevant condition of release as at your nominated retirement date. If this is not the case, you will not be able to access your superannuation benefits until after you have reached your preservation age or satisfied a relevant condition of release. You should check your preservation age before using the calculator.

Pension withdrawals

It is assumed you will commence an account-based pension with your superannuation savings balance at the time of full retirement. Pension payments are assumed to be made on a monthly basis.

Pension payments after age 60 are assumed to be tax-free. For the purpose of calculating taxation on pension withdrawals before age 60, the pension is assumed to commence after 1 July 2007 and hence the proportioning rule applies which divides the pension income into a tax-free and taxable component. The tax-free and taxable components are calculated based on the projected concessional and non-concessional contributions in the accumulation phase of the projection.

Life expectancy

The Australian Life Tables 2005-07 are used as a basis for illustrating how long individuals could be expected to live, as well as for determining your life expectancy for taxation purposes.

Life expectancy indicators are rounded up to whole numbers of years.

Centrelink

For the purpose of this summary, no allowance for potential eligibility for the Age Pension has been made. Please see a licensed financial adviser if you require further assistance in this regard.

Your results

The projection of your estimated retirement balance and the age to which your balance is projected last in retirement are based on the assumptions in this section as well as the values on the "Editable Assumptions" tab.

The Desired retirement balance has been determined as the minimum balance required in order to provide the "Desired income in retirement" from your selected retirement age for the "Number of years you anticipate spending in retirement".

The "Desired income in retirement" is initially set to 75% of your current post-tax income. The "Number of years you anticipate spending in retirement" is initially set to be your life expectancy at retirement based on the Australian Life Tables 2005-07.

Both of these values can be updated on the "Editable Assumptions" tab to values that better reflect your desired income in retirement.

General

For the purposes of determining income tax and contribution caps, it is assumed that the projection is run on the first day of the financial year and that you are your current age for the entire financial year.

It is assumed that you have provided your tax file number to your super fund.

It is assumed your superannuation fund is a taxed accumulation fund. This calculator is not suitable for members of an untaxed fund or for members of a defined benefit fund.

This summary has been produced by Rice Warner Pty Ltd, ABN 35 003 186 883 in conjunction with ANZ. With the exception of gross investment returns, the default assumptions, methodology and calculations for this summary have been provided by Rice Warner. Whilst the default assumptions are generally considered to be reasonable, they may not align with your personal circumstances.

The results are a projection only and are not guaranteed. You should not make any financial decisions on the basis of this summary without first seeing your licensed financial adviser.